09/16/2022 · 4-minute read
Natural Resources Canada engaged with stakeholder groups, provincial and territorial governments, and Indigenous partners to develop a hydrogen strategy to enable Canada to meet its net-zero climate change goals by 2050, diversify its energy mix, and generate national and cross-border economic benefits.
We outline the near-, mid-, and long-term initiatives that are part of this strategy, actions that have been taken to date at various government levels, and some of the risks associated with hydrogen production.
The focus during this initial five-year period is on laying the foundation for Canada’s hydrogen economy. This includes:
Developing new hydrogen supply and distribution infrastructure to support early deployment HUBs.
Driving investment through regulations such as the Clean Fuel Standard.
Introducing new policy and regulatory measures to advance the net-zero emissions agenda.
Investing early in innovation to achieve medium- and long-term goals.
During this five-year period, growth and diversification activities will include:
Growing early deployment HUBs and initiating new ones, all connected by corridor infrastructure.
Focusing on hydrogen use applications that provide the best value proposition relative to other zero-emission technologies, for example, fuel cell electric vehicles and transit buses.
Production of hydrogen on a larger scale to allow for hydrogen/natural gas blending for industry, the built environment, and as a feedstock for chemical production and hydrocarbon upgrading to be commercialized in regional HUBs.
Deploying hydrogen in mining operations as a result of implementation of a regulatory framework and market-ready technologies.
Exploring through pilots hydrogen as a utility-scale energy storage medium.
At this stage, Canada should start to realize the full benefits of a hydrogen economy with deployments increasing and new commercial applications growing, all of which would be supported by a foundational backbone supply and distribution infrastructure. This will result in:
Advances in battery technology and differentiation leading to higher power demand applications (utility biased) being predisposed toward hydrogen energy storage and lower power demand applications (efficiency biased) using batteries for energy storage.
Dedicated hydrogen pipelines becoming an attractive alternative as the percent of hydrogen in NG systems increases.
Heavy emitting industries adapting their operations — including ammonia and nitrogen fertilizers, and low carbon steel — as low carbon intense hydrogen is more widely available.
Hydrogen blending projects, which consist of injecting hydrogen into delivered natural gas to reduce the carbon footprint, are already underway.
Smaller hydrogen hubs are being developed in combination with and in order to serve hydrogen fleets.
Larger hubs, like the Edmonton Region Hydrogen HUB, have been announced in line with Canada’s net-zero goals.
A number of large-scale blue hydrogen production facilities also have been announced and are in development, as are large-scale carbon capture and sequestration projects.
In short, the Canadian hydrogen economy is well on its way and appears to be generally tracking with National Resource Canada’s strategy.
Hydrogen offers many possibilities — it can be used to decarbonize industrial processes, heat buildings, and fuel cars, airplanes, and trains — but its increased production is expected to bring new risks, some of which are considered below.
Safe processes and risk management are going to be vital going forward to reduce the frequency and severity of hydrogen-related accidents and to maintain reliable hydrogen supplies. Insurers are likely to be at the forefront of the conversation as the hydrogen transition gets underway.
If you have any questions about the growing hydrogen economy in Canada and related risks, please contact your Marsh advisor.
CEO, Energy and Power, Marsh Specialty UK
Global Hydrogen Practice Leader
National Energy Industry Leader